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Tax Tips Newsletter
Serving you since 1993
December 2008 - Vol 3, Issue 8
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Greetings!
Gingerbread Houses

Happy Holidays! I hope that this holiday season will bring you and your family much joy and happiness. May 2009 be a healthy, prosperous year.

Tax season is right around the corner. We will be sending out the individual organizers right after the end of the year.

This year I would like to offer my individual clients several different options. You may get your organizer by mail, by e-mail as a PDF document or complete an e-organizer. The organizer that comes by mail is the how the organizers are usually sent out. If you would prefer the PDF file you will get the same documents but in a PDF format by e- mail. You will still have to print out, complete the organizer and send it back to me. The e-organizer is a little piece of software that you fill in. When you are done you send it back to me. For all organizers you will still have to sign the engagement letter and mail it and any supporting documents to me in order for me to complete your returns.

If you are interested in either the PDF organizer or the e-organizer, please contact me or my office and let me know of your preference before December 15th. If I do not hear from you, you will get a paper organizer.

Business engagement letters will also be going out right after the end of the year.

The office will be closed for the Christmas holiday on Thursday, December 25th and Friday, December 26th and the New Years holiday, Thursday, January 1st and Friday January 2nd.

1040 with broken pencil
Though Congress tried to extend some tax breaks for businesses, it could not put the necessary legislation together before adjourning for Thanksgiving. Congress was able to pass a law authorizing seven more weeks of unemployment benefits for out-of-work individuals (13 more weeks of benefits for individuals in states where the unemployment rate is above 6%).

A look at the provisions in the tax relief measure that failed to pass will give you an idea of changes that are very likely to occur, if not in a second lame-duck session on December 8, then in 2009 when President-elect Obama takes office. Here are the major provisions in the proposed bill -
* Extension through 2009 of 50% bonus depreciation for the purchase of business equipment.
* Extension through 2009 of up to $250,000 first-year expensing for the purchase of business equipment.
* Easing funding requirements for pension plans to help cash-strapped businesses.
* Temporary suspension of required minimum distributions from retirement plans for those 70½ and older.

Congress is also set to create a stimulus package in January comprised of tax cuts and some $500 billion in federal spending on infrastructure over the next two years.

Stay tuned for what is likely to be a year with multiple changes to the tax code. Make it a priority to contact us for tax guidance before you make important financial decisions this year.
BMW
Are you drawing up your year-end charitable contributions list? After you check it twice, add a reminder to gather the paperwork required to claim a gift for yourself: an itemized tax deduction.

Here are four tips.

1. Remember the new rules for cash donations. You'll need a written record to deduct cash donations on your 2008 tax return, no matter what amount you donate. The record must be written documentation from the charity or, if the donation is for less than $250, it can be a cancelled check, credit card, or bank statement.
If you contribute via payroll deduction, keep your pay stub and documentation from the charity (a pledge card, for example).
2. Know when old rules still apply. If you donate $250 or more in money or property, ask for a receipt from the charity showing how much you contributed and any benefit you received in return.
3. Log vehicle expenses. Your record should indicate the charity's name, the dates you used your car, and either the actual cost of gas and oil or the number of miles you drove. Parking fees and tolls are also deductible, whether you claim actual costs or the standard mileage rate for charitable driving (14 cents a mile for 2008).
4. Keep receipts for unreimbursed items. These include out-of-pocket costs directly related to charitable service, such as buying or cleaning uniforms used for your volunteer work.

Additional recordkeeping rules may apply, depending on what you donate. For instance, some noncash contributions require an appraisal. Give us a call. We can review the records you need to obtain the maximum tax benefit.
Golden Egg
The Tax Tip this week has to do with planning for 2008 taxes. It deals with making sure you take your required minimum distribuiton, making charitable contributions, etc.br>
The Business Tip of the Month has tips for running a successful franchise.

The Financial Tip of the Month has tips on how to save money on gas.

The Fraud Alert deals with cell phone identity theft.

Photos © Bigstockphotos.com, istockphoto.com

Sincerely,
Linda Heineman
Linda L. Heineman, CPA, CITP

phone: 626-577-0979
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